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Channel 89 (615 MHz)

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TOPIC FREQUENCY

Us 6, Uc 3, L.a. 2, Ms. Hale 2, Francis Cowho 1, Jason 1, Morian 1, Todd Ritchie 1, Moran 1, Donna 1, Mr. Costa 1, Mr. Moran 1, Telesell 1, Hetchy 1, The City 1, California 1, Deliberation 1, Expos 1, The Co 1, U.n. 1,
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  SFGTV2    [untitled]  

    January 22, 2013
    3:00 - 3:29pm PST  

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local enforcement and job training please? >> yes this program we are projecting to create 3,000 jobs per year that would be generate by this employment and the employment would be under taken by private company asks so they would be solar installingers and energy fishgee retrofit companies under under the local hiring ordinance there is a requirement that a certain number of jobs be local and so we have been working to earth a earth
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earth a certificate contain a job [spelling?] and there is no program to employ the people trained by the program and so we are recommending o wd restart and expand it's operation to train these folk who would then be qualified into a pool of local labor for hiring for by the company that is implement these projects. . >> all right mr. moran? one of the things i have been trying to figure out is how this effort that you are describing measures with what we have in front of us and with what the board of supervisors have improved and.
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>> yes, last time, i asked whether it was an either or and whether we have phase one in front of us or if you can do both if you choose to and the sense that i had it was more the latter and in reading this material though, it seems that you proposed to somethingly change what would be in the phase one on offer particularly the price and that, then that raises a series of very particular question that is have not been addressed in this material and so for example we have not to exceed rate proposal in front of us that is a rate proposal that says if you are doing what i would call our version of phase one this is an a money that we believe is necessary to cost the cost of
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that. >> you are referring to the resolution. >> yes and do you have a copy of that resolution? no i do not, well you should because it's really relevant for this discussion. >> can you give him a copy donna? what you are suggesting is that the premiums that we are proposing to require from phase one participation can all but disappear. >> yes. and it's not clear to me what the math is that leads you to that conclusion. >> okay. and now you have increased and your proposal increased the service provided, i can only assume that, that service will create a sufficient profit that
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you can off set the costs that you are deciding not to pay for the premium and before i can even think about that i need to know what that math is what the mechanism is by which we can offer on phase one a lower rate? and what i'm concerned about is that if that includes a bet that you are going to have certain facility it's online on a certain schedule schedule and the off setting revenue is sometime in the future then we have to be more confidant about what that future is and that is a much more complicated discussion but i think it's much more helpful to know for phase one and i do not expect you to know that off the top of your head here but for phase one how is it that you can bring that down and i do notice on your
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preliminary resources mix you have a lot of wholesale resource application and that is subject to the same resource that the she'll contract is and or worst at least the very well contract says what the rates are and if this is under some other contract we should know it and if it's an open market then that has significant risk attached to it. commissioners the risk is as near as i can tell in here one of the risks in here is a perform risk and we are talking about thousands of small projects having to get implemented and you folkings prepared a risk report which went into that and highlighted that as one of the real challenges of the program and how can you go out and get all these things done quickly and at the cost that you are suggesting
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is reasonable? this material shows that it would be done by the department of management and projects and so, what -- what i had hoped to wrap my point up. what i had hoped for of the was a segmentation of the decision-making process that allows us to do whatever we do for phase one and take time to understand what your proposal is for phase two and so it doesn't sound like that is the autopsy that you are giving me and that i have to understand anymore phase one and this material hasn't helped me on that. >> i'll do my best evident. main difference here for phase one, there is no real change to the she'll agreement required. we are not recommending a change to the agreement for phase one.
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the main change, is adding the increment available of hetch hetchy power making the decision later than selling it into the market to make it available to the c c a as a matter of policy. that ads lower cost energy into the can you repeat mix we have you have for she'll. >> and do you account for the per count revenue? >> what?. >> commissioner there is no forebound revenue and the hetch hetchy is modeled at market rate and those have been confronted by todd ritchie. >> yes and the other big piece is the change in the renewable energy credit strategy because
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there are several different categorize and they are available at very different prices on the marketplace but as far as the wholesale we have five% power purchase treatments just like the she'll agreement and so there is no speech special wholesale strategy in this model the change in the reek strategy and a change in the hetch hetchy strategy and they are agency decisions from which the program from the agency side and not some new requirement on she'll that would require going back to the drawing board, urk you are talking about changing up the resource mix rather than the local build-up pees piece for phase one. >> that is right is then a slight different number of customers with that mix. 12 residential. >> it's still upall residential at this point. but we want to writing on the commercial customers as soon as possible. >> that is correct but i'm more concerned that you have not
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seen this resolution because it speaks to the very issues that we have been talking about here and that we are about to vote on. i was told that there were no action items and so i'm completely taken by surprise. >> well the staff has communicated with you on the ten-minute requirement and the communicatessed with you on the resolution yes or no. >> yes, all of the materials before you are publicly available, we notified local power that's correct the three items to be that appear on your agenda would be discussed today and after the meeting with the commission secretary informed then that the commission had alcarted ten mints. >> okay. (allocated ten minutes. >> there is a draft resolution to be carefully noticed that no
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action to adopt the scheduled would a don't --. >> right the only issue we are having now is a discussion and i want to make sure that everybody is on the same page for this discussion because the resolve seconds of this draft resolution are very important as commissioner morian and commissioners have talked about. and what we will get to very quickly is with the expect to not to exceed rate would your recommendation be not to adopt those. >> that is correct we believe ts too high and would cause harmful public relations as far as the trust of the city and it's also unnecessarily high. with all do respect to staff and the efforts to get to this point this really is a matter of going out to the market with a lot of requirements placing all of theth requirements on a supplier in a market where a feud actions by the agency would
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significantly lower the cost basis of the service and those actions have not been taken there is a result that you have a very high price here. >> and so the danger is that under the statute 117 that the customerses that optout morian raised in in the meeting that in an experience with direct access has shown that the opt in inrates for the green access is effectively low and effectively you have loss the customer that is opt out and that could be in the hundreds of thousand and is so we see it as being unnecessarily risky as far as the participating load of the program and this could easily be improved by these very simple action to the agency matters of monthly would he. policy. >> and those matters are the two that you have identified.
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yes, sir. >> is there any assumed financing by of the first fades by the second phase? >> i want to make sure that i answer your question correctly there is no amortization in the model or delaying of deter service in the model. there is no provision of revenue from other customers for those phase one customers. they are ultimately combined into one group. i believe ill the answer is no. >> if phase two were delayed how would that ivelgt the financial performance of phase one. >> i'm going to let my mathematician answer that. >> depending on the rate increase for pricing so the buildup acts as a hedge against wholesale expos so the question is how does delaying that
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buildup impact this agreement depends on what reek costs.. >> would you mine coming up and giving us special courtive on this because what i think is being said is that phase one is a resource mix question and these can rex and hedging makes those available in the recollection strategy and if we did that alone and build out aside and if we want to talk about phase two as a build outthat, that would potentiallily decrease our rates the customer rates for c c a? is that a true assumption? because i think that is quite significant because we have kept coming up against this issue of the rate increase and that we don't the want to lose customer and is that could potentially be a deal breaker for some customers. >> so assistant general manager. we have the shared
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goal to make sure had a we are going out with rates as low as they can be where we are not yet of the same opinion as what is firm and available from hetchy and also the costing and so to give you a perspective we are typically sell hetchy power over the last ten years when we have excess to sell and we don't always have excess to telesell at 4 kilowatts an hour and the pickle is in dry years suggests that we may not have in the current year firm power and that is a key issue and so ms. hale who knows this better than i do the seasonality and the if i rememberness of how much is available when, when we can bank through the year and buy more expensive during the none run off period matters a lot. and so mr. moran races a good point
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if you bring up the most average and cost effective which hetchy is the most cost effective in california and it's an amazing system but i can't tell you it's firm for the next ten or 20 years and you will see that in one of the slides in the consumptions is that ap i has assumed that we have relatively standard prices and relatively affordable hetchy and that it's form year after year and that is a risk had a i can't mitigate away without collateral or or reserves. >> and typically what we do on that is we have a farming contract that says, where hetchy cannot meet the load. somebody else will and we can lock in the price for that. that is typically always more expensive and so in the last ten-seven years, we typically had to buy at six to 7 cents per kilowatt hour and we are always trying to sell it at
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four so we are trying to maximize for hetch hetch worry and but which are having to buy when others have to buy too and so the risk is all a material matter to mitigate away and i i understand u.n. they are doing additional work on that over the next few months and. >> the firming costs are not separately dwhraintd and so that would been something where they would look at their reserves or projected surplus and decide how to allocate those if necessary. and that is a significant issue what staff has come up before and what the city leadership has given us authority to go forward with is one that mitt gates and minimizes those risks and so with a contract with she'll with six known price that provide it
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in dry years and wet years and keep it green is the only way that we could come to you and propose to you and prepare for the board a way to do that into a type of a contractual risk transfer. because we cannot do even do that because we don't know predictably what rainfall will be nor does anybody on our planet and so that is why you enter into a contractual follow up party. >> any other comments? i do want -- if i may mr. president and i do realize that there are some members of the board of supervisor and-if it's already if we can invite them up to comment if they would like. >> i'm francis cowho gave me a cart from public comments and would you want to come up and if they are willing and want to speak ... . >> if i may, just make one
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final remark, we did model the financial conditions in the model. >> i do read the resolution that is important to us can i have your input on that? mr. costa? . >> commissioners as a member of the public i have been participating in these deliberations since the year 2,002. who i see here is that from the finds of the public when we listen to the deliberation at n afc o and what took place over there you have a very very far cry what has transpired today. it's a very refar cry. too many variables have been imbruesed now, not
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very long ago. your staff went before the trans bay the joint trans bay and presented something over there insisting that or projecting that they could supply hetch hetchy power. . and that is not very easy. as you know your chief financial officer has said you can predict. the time of energy or the quantity of energy we are going to get from hetch hetchy whether it's a reliable amount to be supplied. if you deal with something like a trans -- they have more money and they can afford to pay more but, the question is are you all able to supply? now your staff, they gained again i plea with you your staff are constituent sitting down
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over there and they have no clue whatsoever about this presentation. in fact, they have no clue, i doubt if they can explain to you and you are welcome to bring them here to you about the resolution. this is -- stick to what is on their agenda and if you bring the variables over here and some of us can connect the dots but most people cannot. and so we have to go slow with this. we cannot introduce too many variables, which do not have certainty. in this business, in this market nobody has certainty and you are a large entity that has control over those thing we
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don't want you all in the business of sub prime loans that is happening with this presentation. too many variables, too much uncertainty, and is totally confused. thank you very much.. >> any comments before we adjourn? hi my name is hope and i have been an alas ska commissioner last co's discussion for c c a and what i here from local power today although it has some different pictures associated with it very much the same thing that local
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power has been saying when last co hired it and did the same thing now that it's under contract with you [spelling?] and the answers that they are giving don't change despite the concerns that have been heard over and over again and my concern and i share the objective of local build out and of keeping the rates low and i think it will be wonderful if we can figure out how do that however local power just keeps saying use prop h bonds for build out despite the fact that repeatedly. city attorney came to l.a. s c o and explained why it's not probably and they are not saying it today but that is the proposal for local build out and the city attorney has explained that it's for private use. and prop h is public bonds. public funds. second, the co general facility
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proposal the combined power is not only is that a continued investment in fossil fuels and it's private, local power has been saying for years now that it doesn't identify and know the sites that those cogent facilities would be located on but they don't think there would be any problem with seek away because it [spelling?] aught to be extent and they don't think there are any citing or permitting issues and they are still saying this at the done annoy where those location are and they are still talking about hetch hetchy power and i trust your staff with i know it's the same issue for all of these times and as a permitting environmental lawyer, i hear the proposal for local build-out would you tell any
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understanding without any understanding that has been given to site and permanentings and that is a huge under takings and certainly without annoy nog what they are proposing. thank you for your time. >> thank you. jason freed l.a. s c o staff on laugh behalf of supervisor chair comp poe and is one comment that wanted to give on this part of the presentation was that making sure that whatever is good much local power's presentation that we are trying to use that to implement that we are not flow throwing down the launch of program and this is key for all of my commissioners and not slowing down the program we need to get this program lamped and up and running as quickly as possible and if there are things that can be utilized in his presentation great but if not we should continue to move forward and there is item a on the
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agenda and there is a presentation on that are you still doing that presentation or is that being moofgd to another date? because i have some comment on the not to exceeds from administrator finns presentation. >> and so for my understanding it was there for discussion, we plan to go back and give more information and have the commission vote on -- are you giving a presentation on it though. >> no, okay now i'll give you some quick comments i'm. . the not to exceed rate staff currently has the recovery of the $13.5 million that is being set aside as the start-up funds that money can actuallily be looked at in two different waysphosis not required by the board of supervisors they said cover as much as you can as wishly as you can but not harmful to the program and the way that you are looking at
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14.4 smldz in two pots of pun money one is set aside for she'll if case we need it repay them and the other is the operational costs that are going to be will and so 4.5 never gets returned backback to the p uc's general comprise department and is locked away in the fund and if you want to recover it overt course of she'll contract. that is perfectly acceptable the 9 million does get returned back to the p uc should the program be prosperous and therefore doesn't believe had a we need to be worrying about that nine millions and we should not be inincorporating that? and you will see in your packets that there is a penny extra for 1.5 and you can reduce that penny to a third of a penny as what is needed for rate of recovery for what i think would satisfy the
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board's request of making sure we receive that money back because the she'll money comes back and the 9 million-dollar you can start roverring that year one every year you review that $9 million and you get part of that money back each other depending on what those rates are doing everything east and that is what we encourage you to do. >> this is an organic progress and that is why there is a draft easy louis and not a resolution for action. i think we are talking all of this input with a full embrace of what we need to do. commissioner. >> i want to understand all of this because it's a lot of information. >> so in the not to exceed rates is this new information for and you would that in fact change the documents that we have looked at as far as the rates go and so would there be an adjustment. >> it doesn't and the key issue is as i mentioned before on average your selling power
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at four crypts and having to buy it at 7 cents and if you look over the last ten years how much hasp net surplus we have had it's very little to nothing. so the issue is we have an amazing system but when he have a lot of water, we have a lot of water and create a lot of extra power, we have many years where we don't have a lot of water during the dry years so just take a ten-year average and looking at the hetchy portfolio and everything we have generated and sold and dry months and none seasonal months and then netting it all out there is not this firm net always availability and so for us to keep to have tot hamping order to mitigate risk the only way to do that is to contract with she'll that provides firm knowable fixed rates and so i wish i could tell you wait another week or two weeks but unless we have more
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storage capacity up at hetchy, i can't testimony you that and tell you that and i'll defer to ms. hale. may be you can address this somewhat briefly because we want to move on from this item and can you tell us and especially our last co commissioners proposition about the h bonds? it's a long question for a short answer but how are you proposing to pay for the local build out. >> we plops that h bonds be used for potentially the whole build out consisting of two major categorize of bonds one being taxable bonds and those would be for private benefit on commercial buildings but then, tax exempt bonds for p uc owned generator and is that would include the wind farm and other large generation in the city and